Hong Kong retail sales contract in February

ChesterYung

HONG KONG--Hong Kong's retail sales by value fell 2.3% in February from a year earlier, a reversal of the prior month's gain partly distorted by the different timing of Lunar New Year, the Census and Statistics Department said Monday.

February's decline followed January's 14.4% rise and came in worse than the median 2.4% growth forecast of four economists surveyed by The Wall Street Journal.

A government spokesman said the city's retail sales tend to show greater volatility in the first two months of the year owing to the timing of the Lunar New Year, which fell in late January this year but in mid-February in 2013. For the first two months of 2014, total retail sales by value increased by 6.6% from the same period a year earlier, the government spokesman said.

Hong Kong's retail sales by volume also fell 2.3% in February from a year earlier, a reversal of January's 16.7% increase, and was worse than the survey's median forecast of 4.8% expansion. Combining the data of January and February of 2014, total retail sales increased by 7.9% in volume over the same period a year earlier.

"Excluding the distortion from different timing of Lunar New Year, the era of double-digit growth has long gone," ANZ senior economist Raymond Yeung said.

"Obviously, tourists' spending is becoming more cautious, consistent with the Chinese government policy to combat 'wasteful and rotting' behavior of civil servants," Mr. Yeung said.

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